An investment of $100 today will avoid $100,000 of environmental damage in 100 years. Calculate net...
An investment of $100 today will avoid $100,000 of environmental damage in 100 years. Calculate net present value to answer each of the following: a. At a discount rate of 10%, is this investment a good idea? b. At a discount rate of 1%, is this investment a good idea?
Homework Answers
t = 100 y , FV = $ 100000
a) NPV = 100000/(1 + 10%)100 - 100 = - $ 92.74
NPV is negative, investment not a good idea.
b) NPV = 100000/(1 + 1%)100 - 100 = $ 36871.12
NPV is positive, investment is a good idea.
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Hey :), Can someone please help me with this question? (if possible, show work and process)...
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Thank You!
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